The company released its 2023 annual report. In 2023, the company achieved revenue of 17.03 billion yuan, a year-on-year increase of 11.6%; realized net profit of 3.4 billion yuan, a year-on-year decrease of 23.1%, and adjusted net profit to mother of 4.70 billion yuan, a year-on-year decrease of 4.6%.
The company's revenue and profit are in line with expectations, and non-COVID-19 revenue continues to grow rapidly, especially in late-stage commercialization projects.
The company's revenue for the full year of 2023 was +11.6% in line with expectations. Among them, revenue from non-COVID-19 projects was about +37.7% year-on-year, with revenue from post-COVID-19 and commercialized non-COVID-19 projects +101.7% year-on-year. Looking at the stages, pre-clinical/clinical phase I and phase II/clinical phase III and commercialization respectively achieved revenue of +9.2%/+12.7%/+12.8%. As biotechnology financing in Europe and the US rebounds, pre-clinical revenue growth is expected to gradually resume. By region, North America/Europe/China/other regions achieved year-on-year revenue of -5.0%/+101.9%/-16.1%/+37.7%, respectively. By business segment, Biopharmaceutical/XDC achieved revenue of 3.3%/207.6%, respectively.
The number of projects continues to increase. Among them, the number of post-clinical (phase III and commercialization) projects has increased significantly, and the number of win-the-molecule projects has reached a record high. In 2023, the number of the company's comprehensive projects reached 698 (+18.7% compared to 588 in the same period last year), of which the number of non-COVID-19 integrated projects increased by 132, setting a record for the number of new non-COVID-19 additions in the year. Looking at the stages: the number of preclinical/phase I/phase II/phase II/phase III/commercialization projects reached 339/203/81/51/24 respectively (300/166/68/37/17 in the same period last year, respectively). The company's commercial production projects increased from 17 to 24 last year, while adding 9 win-the-molecule post-clinical and commercial production projects, reaching a record high and boosting the growth momentum. On a quarterly basis, the number of new Q1-Q4 projects was 8/46/61/132, respectively. The number of new projects was most affected by the slowdown in biotechnology financing in the first quarter of 2023, and has begun to recover since the second quarter. Recovery was faster in the second half of the year.
Unfulfilled orders and potential milestones ensure the overall sustainable growth of the company. At the end of 2023, the total amount of the company's outstanding orders reached US$20.592 billion, and uncompleted service orders reached US$13.398 billion, providing a guarantee for subsequent sustainable growth; uncompleted potential milestone orders reached US$7.19 billion, and orders to be completed within 3 years reached US$3.85 billion, consolidating recent revenue growth expectations.
The R&D pipeline layout is comprehensive and forward-looking, and platforms such as ADC, dual & multiple antibodies, and vaccines are developing rapidly. In 2023, out of the company's total of 689 comprehensive projects, there were 308/114/143/72/36/25 monoclide/double antibody/ADC/fusion protein/other protein/vaccine respectively (274/99/94/69/32/20 in the same period last year, respectively). The company's R&D pipeline covers all kinds of biopharmaceuticals, continuously empowering customers around the world to innovate.
Looking ahead to 2024, the recovery trend is in place, and the company is expected to achieve steady growth. The company expects revenue growth of 5-10% in 2024, and non-COVID-19 revenue is expected to increase by 8-14%.
Profit forecast and valuation: We expect the company's revenue for 2024-2026 to be 18.48 billion yuan, 21.35 billion yuan, and 24.83 billion yuan respectively, with year-on-year increases of 8.5%, 15.5%, and 16.3%; net profit to mother will be 3.834 billion yuan, 4.568 billion yuan, and 5.366 billion yuan, respectively, corresponding growth rates of 12.8%, 19.1%, 17.5%, and PE 14x, 12x, and 10x respectively. Maintain a “buy” rating.
Risk warning: The growth rate of the industry falls short of expectations, policies have a negative impact, and terminal sales of customer products fall short of the expected risk.